A Quantitative Analysis of the Impact of European Promotion Banks on the Competition of EU Countries through Linear Conventional and Machine Learning Methods

Abstract

In recent years, there has been a growing demand for European Promotional Banks to become more efficient and effective in their activities. Their role is to support small and medium-sized enterprises (SMEs) and foster innovation. The European Union’s commitment to the elevation of economic development and the support of competitiveness in its member countries is demonstrated by the presence of several promotional banks. This study aims to highlight the role of promotional banks on the competitiveness of European countries using two alternative methodological approaches. Consequently, comparing traditional linear methods with linear machine learning methods is also an important aspect of this work. A five-year period starting in 2017 is used for both approaches based on primary data collected from 11 European countries. Conclusively, this study results in underlining that promotional banks are an important part of the EU’s efforts to ensure countries economic .